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Ramos v. Wells Fargo Home Mortgage

United States District Court, D. Arizona

September 11, 2017

Bonnie T. Ramos, et al., Plaintiffs,
Wells Fargo Home Mortgage, et al., Defendants.


          Honorable G. Murray Snow United States District Judge.

         Pending before the Court is Defendant's Motion to Dismiss Plaintiffs' First Amended Complaint (“FAC”) pursuant to Federal Rule of Civil Procedure 9(b) and 12(b)(6). For the following reasons, the motion to dismiss is granted in part and denied in part.


         In November of 1969, Bonnie T. Ramos (“Mrs. Ramos”) purchased a home at 2340 W. Adams Street, Phoenix, AZ 85009.[1] (Doc. 9 at 3.) The home was financed with a VA loan Mrs. Ramos received from Colonial Associates Mortgage. (Id.) Mrs. Ramos was the only individual named on the loan, but her husband, Mr. Ramos, is also a named Plaintiff in this case. (Id. at 2.) Mrs. Ramos refinanced the loan first through Ace Mortgage Co. and again through WMC Mortgage in May of 2004. (Id.) In December of 2008, Mrs. Ramos requested a loan modification from Wells Fargo Bank (“WFB”), and entered into a written agreement with WFB on or about August 20, 2009 (“2009 modification). (Id. at 4.) The 2009 modification was executed under the Home Affordable Modification Program (“HAMP”) which decreased Mrs. Ramos's interest rate, but increased her monthly payments by several hundred dollars. (Id.; Doc. 19-1 at 2; 13-1 at 16.)[2] Mrs. Ramos informed WFB that she wanted the loan modification to decrease her monthly payment, not increase it. (Id.) In response, WFB advised her to accept the modification and reapply for another HAMP modification to receive a lower monthly payment, even though her finances had not changed since she first applied. (Doc. 9 at 4-5.) Mrs. Ramos alleges that from 2009 to 2016 WFB continuously told her that required documents for the HAMP application were either unsent or missing, despite her repeated assertions that she had sent the requested documents. (Doc. 9 at 5-6.) In May of 2016 WFB declined Mrs. Ramos' HAMP application. (Doc. 9 at 8.) Mrs. Ramos states that WFB told her HAMP rules prevented WFB from accepting any further payments until she prevailed on appeal. (Id. at 10.) Ramos alleges that WFB told her that she would have to be in default for a period of three months before she could appeal the denial. (Id. at 19). Mrs. Ramos attempted to make her monthly payments as of July of 2016, but WFB has refused to accept them. (Id.) In September of 2016, Mrs. Ramos learned WFB had initiated foreclosure proceedings. (Id. at 11.)

         Plaintiffs commenced this action against WFB in Superior Court on or about January 10, 2017. (Doc. 1.) WFB removed the action to this Court on January 31, 2017. (Id.) In Plaintiffs' First Amended Complaint (“FAC”), Plaintiffs allege four claims for relief. First, Plaintiffs allege WFB tortiously breached the Implied Covenant of Good Faith and Fair Dealing by (1) not complying with HAMP regulations or the Consent Order from the Department of the Treasury outlining standard mortgage servicing practices, and (2) providing them with false information regarding HAMP's loan application and appeal process. (Doc. 9 at 12-16.) Second, Plaintiffs allege WFB negligently breached the Arizona Good Samaritan Doctrine by (1) misleading them into modifying their existing loan instead of applying for a new loan, (2) improperly administering the first HAMP application by offering a loan modification that raised their monthly payments, (3) improperly advising Plaintiffs that they needed to default on their loan in order to appeal the denial of their HAMP application, and (4) unjustifiably denying her HAMP re-application after seven years. (Id. at 17-22.) Third, Plaintiffs allege that WFB engaged in negligent or intentional misrepresentation by luring Mrs. Ramos into accepting the 2009 modification while advising her to reapply for another modification, as it knew that any such reapplication was futile. (Id. at 23.) The FAC alleges that Mrs. Ramos relied upon WFB's representations, and that if she had known that a new modification was impossible, she would have defaulted on her loan earlier rather than continue to make payments. (Id. at 23-24.) Fourth, the FAC alleges that WFB tortiously breached the Truth in Lending Act (“TILA”) by: (1) failing to provide Mrs. Ramos with a Truth in Lending Statement or similar disclosure detailing the cost of the HAMP payments, (2) failing to disclose information regarding WFB's finance charges, and (3) changing the amounts and demanding additional payments via phone conservations and not in writing. (Id. at 25-30.) The Plaintiffs seek monetary and declaratory relief that WFB is liable for the tortious conduct outlined in the FAC, and that a Cancellation of Notice of Trustee Sale be recorded with in the Maricopa County Recorder's office.”[3] (Doc. 9 at 32.) In response, WFB filed the instant motion to dismiss.


         I. Legal Standard

         “A Rule 12(b)(6) motion tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6) a complaint must contain more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A plaintiff must allege sufficient facts to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.”). In deciding a Rule 12(b)(6) motion, a court must accept all factual allegations in the complaint as true, in addition to the reasonable inferences that can be drawn from them. Id.

         II. Analysis

         A. Mr. Ramos's Claims

         The Complaint states that Mr. Ramos “sues in his individual capacity for non-community damages, ” but the Complaint does not provide any facts indicating that Mr. Ramos was damaged in his non-community capacity. (Doc. 9 at 2.) Mr. Ramos has not alleged any “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged against Mr. Ramos in a non-community capacity.” Ashcroft v. Iqbal, 556 U.S. at 678. Therefore, such claims are dismissed.

         B. Tortious Breach of Implied Covenant of Good Faith and Fair Dealing

         Arizona law “implies a covenant of good faith and fair dealing in every contract.” Rawlings v. Apodaca, 151 Ariz. 149, 153, 726 P.2d 565, 569 (1986). This covenant imposes a duty on both parties to ensure that “neither party will act to impair the right of the other to receive the benefits which flow from their agreement or contractual relationship.” Id. Generally, this cause of action arises as a matter of contract law, not tort law. However, if there is a special relationship between the two parties, a plaintiff can seek relief as a matter of tort law.[4] McAlister v. Citibank (Arizona), a Subsidiary of Citicorp, 171 Ariz. 207, 213, 829 P.2d 1253, 1259 (Ct. App. 1992). A special relationship arises between parties where there is a “fiduciary relationship, elements of public interest (e.g., unequal bargaining positions), or adhesion.” Id.

         Mrs. Ramos alleges that WFB engaged in a host of bad faith behaviors while considering her application for modifying the 2009 modification. However, she does not allege any facts that indicate the existence of any contract entitling her to a loan modification following the 2009 modification. Instead, she relies on her 2009 modification contract, which does not mention any right to a subsequent modification. WFB could not have breached the covenant of good faith and fair dealing during negotiations for a new modification absent the presence of a contract that included, at the least, an implied right to subsequent modification as a benefit of the contract. See Weisman v. Capital One NA, No. CV-15-00657-PHX-GMS, 2016 WL 558416, at *3 (D. Ariz. Feb. 12, 2016); Hunter v. CitiMortgage, Inc., No. CV 11-01549-PHX-FJM, 2011 WL 4625973, at *3 (D. Ariz. Oct. 5, 2011) (“Plaintiffs have not pled the existence of a separate enforceable contract to negotiate for a loan ...

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